The pound sterling managed to show a strengthening against the US dollar in the European session yesterday although analysts still maintained a downward forecast for the British currency.
Supporting the Pound’s strengthening when the UK’s Gross Domestic Product (GDP) growth report for the last quarter recorded an increase in the final reading of 1.3% compared to the initial reading of 1.0%.
The price movement on the chart of the GBP/USD pair has shown a surge in Wednesday's trading yesterday from the level of 1.37150 in its initial decline, up to the level of 1.13800 seeing the price test the resistance zone in the New York session.
Giving the Pound an edge as the US dollar depreciated slightly yesterday ahead of President Joe Biden’s speech for an economic aid package and analysts also saw profit-taking activity at the end of the first quarter of 2021 push the US dollar depreciating.
Closing the New York session trading lower below the 1.38000 level, the price movement in the Asian session this morning was slower for the start of trading for April.
Investors are also likely to be more cautious ahead of the U.S. NFP jobs data report on Friday in anticipation of more aggressive price movements.
If the price manages to continue rising, the resistance zone at 1.38000 needs to be broken to give a clearer signal of a bullish trend change to investors on the GBP/USD chart.
The higher rise will head up to the 1.40000 level after passing some previous price focus zones.
On the other hand if the price is pressed lower again, the level of Moving Average 50 (MA50) on the 1 hour time frame of the price movement will support the lower decline. A drop below this level will be seen as an early signal for the price to resume its decline.
The 1.37000 level will be tested as a price support level before the next lower decline is expected up to the 1.36000 level.
